Thoughts on Game Theory in Economics

According to Wikipedia, game theory is a field of applied mathematics in social science (mainly economics). Game theory can also be defined as competition theory expressed from the perspective of profit and loss between conflicting participants. Game theory mathematically tries to place the behavior in a strategic context, and one success in making a choice depends on the choice of others. The traditional application of this theory attempts to find a balanced equilibrium in these games.

Game theory is a science field that analyzes incentives from an economic point of view. It has a design (synthesis) incentive system in economics called mechanism design. In fact, in theory, institutional design is actually an area of ​​tokenized ecosystem design. Over the years, researchers in this area actually came up with many wonderful theories, which are the quality levels of the Nobel Prize. What is closely related is economic game theory. However, traditionally there is no good way to harmonize theory with practice. After all, how many times does an academic economist (or someone else) have the opportunity to develop the economy? However, this is an exact problem encountered when designing a tokenized ecosystem. The closest possibility is the video game economy and public policy design.

Mechanism design can be thought of as the opposite of game theory. In game theory and game settings, we will check the result based on the effectiveness of each participant. In the mechanism design, we first start with the desired result, then design a game motivating participants to produce results. It is important to understand not only the appreciation related to the digital shortage but also the economic benefits that participants receive from holding tokens. Connecting economic benefits to the use of tokens will allow more access to services via tokens than any other currency. This is especially true when there are a lot of tokens and there are few shortages. (Reference: Dr. Avtar Sehra, Philip Smith, Phil Gomes's Early Coin Product Economics)